The Kākā by Bernard Hickey

TL;DR: The podcast above of the weekly ‘hoon’ webinar for paying subscribers last night features co-hosts Bernard Hickey and Peter Bale talking with:

* The Kākā’s climate correspondent Cathrine Dyer talking about the National-ACT-NZ First Government’s release of its first Emissions Reduction Plan;

* University of Otago Foreign Relations Professor Robert Patman and special guest Dr Karin von Hippel, the Director General of RUSI, the Royal United Services Institute in London, talk about what the attempted assassination of Donald Trump means in Geopolitics and for Aotearoa-NZ;

* Simplicity CEO Sam Stubbs talks about Simplicity Living’s progress building hundreds of apartments a third cheaper than others, and how tens of billions of KiwiSaver and other institutional funds could be mobilised to help solve Aotearoa’s housing crisis.

The Hoon’s podcast version above was recorded last night during a live webinar for over 150 paying subscribers and was produced by Simon Josey.

Near the end of the podcast, Peter referred to this cartoon in New Yorker. Robert wrote this article for Newsroom on foreign interference in New Zealand. Robert wrote this article for RUSI on New Zealand risking sending the wrong message to Ukraine.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR : Here’s the top six items of climate news for Aotearoa-NZ this week, as selected by Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer, most of which they discussin the video above.

* According to experts, the rate of ocean surface warming around New Zealand is “outstripping the global average threefold in some areas and twice on average”. They warn that the severity of storms like Cyclone Gabrielle and the ones that recently hit the East Coast are expected to grow even higher in the future as a result.

* At the same time, a new briefing from Public Health Communication Centre Aotearoa (PHCCA) claims the Government’s policy response is incoherent, saying that ‘clean-ups are not enough’!  Further,  “It is evident that the current Government is failing to make the connection between their climate change policies and increasing negative impacts on communities and the country.”

* Their call for ‘policy coherency’ is echoed by carbon market expert Christina Hood, who suggested recently that key ministers appear to be operating under the misapprehension that emissions growth caused by their policies will be automatically offset by the ETS.

* That same policy incoherency is replicated again in the government’s new ‘Five-point’ climate strategy as experts point to inconsistencies in the policy approach.

* As if to put a pin in the risks to human wellbeing, ‘crazy’ ocean temperatures super-charged the earliest ever recorded category 5 hurricane in the Atlantic Ocean. Hurricane Beryl slammed into Texas this week, turning out lights for two million households, after killing 11 people during its early season rampage across the Caribbean.

* Canadian oil companies, lobby groups and third-party advertisers are scrambling to scrub their websites clean of carbon capture claims likely to fall afoul of new greenwashing rules.

(See more detail and analysis below. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. NZ waters warming more than global average

New data sets released by Stats NZ this week show sea surface temperatures around the country in 2022 and 2023 were the hottest ever recorded. Areas to the west of the North Island were bathed in heatwave conditions for nearly 90% of the year.

Dr Matt Pinkerton, Principal Scientist – Marine Ecology & Remote Sensing at NIWA points out just how dramatic and localised the increase has been:

"Things are getting hotter because of climate change – we knew that already – but the accelerating pace of warming of the oceans around New Zealand is surprising. The rate of ocean surface warming round New Zealand is now outstripping the global average threefold in some areas and twice on average. This disrupts the narrative that New Zealand is well placed to avoid the worst that climate change will bring. More warming brings more marine heatwaves and the increase in these abnormally hot events since 2010 is dramatic.”

Acceleration in the rate of ocean warming has consequences that extend beyond the marine environment itself, with the ocean being a dominant factor in the weather experienced in Aotearoa. Dr. Georgia Grant, climate scientist at GNS Science warns of increasing storm intensity.

“It’s important for New Zealanders to be aware that, even if global warming is kept to 2°C above pre-industrial temperatures in line with the Paris target (which the world is not on track to meet), we should expect higher ocean temperatures here. As an island nation, the ocean dictates much of our weather, and increasing ocean temperatures are one of the factors as to why storms like Cyclone Gabrielle are expected to increase in severity under climate warming."

Aotearoa’s ongoing vulnerability to climate-amplified storms has already been brought home to communities on the East Coast , forced  to evacuate once again last month  as widespread flooding, slips, power outages and 6-metre swells hit the region.

2. The Govt’s incoherent climate approach

Yet government policy is failing to engage with the recurring and amplifying nature of the risks being faced. A new briefing from Public Health Communication Centre Aotearoa (PHCCA), an independent organisation hosted by the Department of Public Health at the University of Otago takes aim at the government’s ‘incoherent response’ to climate change, saying that ‘clean-ups are not enough’!

“It is evident that the current Government is failing to make the connection between their climate change policies and increasing negative impacts on communities and the country. The Government is promoting more mining for fossil fuels, weakening existing protection for wetlands (key to effective flood mitigation and carbon sequestration), focusing on large-scale roading projects while reducing spending on public transport, and continuing to delay action on reducing agricultural emissions. 

In the wake of damage to homes in East Coast communities, it must also be remembered that the Government’s Fast-Track Approvals Bill proposes to reduce the rigour with which major housing (among other) developments are considered and approved.”

The briefing points to the resulting impacts on the health and well-being of citizens (for example from polluted drinking water and displacement) as well as the economic consequences from infrastructure damage and interrupted supply chains. Importantly, they note that the impacts are not experienced equally by people, with rural, Māori and low-income populations disproportionately affected. This was reflected in Wairoa Mayor Craig Little’s response to the storm,

“I don’t know how we’re going to get through this one, to be honest. We are a poor community, and this is just another big kick”.

 The PHCCA are calling for more policy coherence, an approach being actively promoted by the OECD. Coherency in policy approaches suggests that consistent policies should be developed across government to ensure they don’t undermine one another and instead produce co-benefits from the alignment of mitigation and adaptation measures.

3. Ministers’ false faith in ETS

In another example, carbon market expert Christina Hood recently pointed out in a post on Linkedin that government ministers appear to be misapprehending the way that the ETS operates, putting too much faith in its ability to offset the increased emissions that are resulting from their own policies being introduced across various sectors.

Like the PHCCA, Hood is also calling for greater policy coherence in an op-ed article for The Post, suggesting that ALL relevant ministers need to be given responsibility and accountability for emissions.

“Understanding that the ETS will not automatically constrain net emissions to meet the 2026-30 budget is one key reason that ministerial accountability matters. Failure to implement the policies agreed in the Emissions Reduction Plan could lead to the target being missed. Other decisions unrelated to the Emissions Reduction Plan that increase emissions could also lead to the target being missed [...].

A robust accountability process would mean ministers assess the emissions impact of all major decisions, liaise with the Climate Change Minister to understand the degree to which the ETS is likely to compensate or not, and make Cabinet aware of any resulting emissions shortfall and its cost. Individual ministers could even be given responsibility to fill any holes that they have created.

Responsibility for the emissions budget cannot sit solely with the Climate Change Minister. The Emissions Reduction Plan is the place to set climate change KPIs for all key ministers.” Source: The Post

4. A ‘plan’ full of contradictions and inconsistency

As if that wasn’t clear enough, expert reactions to the Government’s new ‘five-point climate strategy’  also point out the lack of policy coherency.

Dr Luke Harrington, Senior Lecturer in Climate Change at the University of Waikato wrote:

“There are several contradictions in the government’s plan. For example, the installation of more fast chargers is largely pointless if you simultaneously collapse the market by removing all incentives to purchase an EV and introduce new disincentives. EV sales have plummeted in recent months as a direct result of recent policy decisions.

“Similarly, the government knows how to turn the Emissions Trading Scheme into a credible market – they just seem unwilling to make the necessary changes that were recommended by the Climate Change Commission.

“Building resilience to future weather extremes sounds great, but this requires adequate resourcing to ensure councils can adapt to these ever-worsening climate extremes. There also needs to be targeted regulation to ensure we’re not building new things in places where they will just be destroyed by the next weather event.

                  Source: The Science Media Centre NZ

The Kākā reported yesterday on the watering down of emissions standards for car imports, a move expected to add millions of tons to climate emissions by 2030, on top of total societal costs of up to $15 billion in present value terms, caused by the removal of the Clean Car Discount and subsequent collapse of the EV market.

Making solid progress in meeting its own goals will require more from the government than looking busy at it ticks items off its quarterly agenda. Incoherent policy approaches will ensure that many of those agenda items work in opposition to one another, fatally undermining results, wasting public resources and diminishing the wellbeing of citizens as they face compounding and intensifying climate change impacts.

5. Beryl batters the Caribbean and Texas

Meantime, the Northern hemisphere is counting its own costs from unchecked ocean heating this week.

Predictions of a particularly intense hurricane season, resulting from record high Atlantic Ocean surface temperatures are proving accurate as Hurricane Beryl becomes the earliest category 5 Atlantic hurricane ever. Beryl had already wreaked havoc in the Caribbean, killing 11 people, before slamming into Texas and taking out the power for more than two million households. Experts claimed the hurricane was supercharged by ‘crazy’ ocean temperatures.

There has never been a category 5 Atlantic hurricane this early in the year before, with most major storms forming closer to September. Beryl, however, rapidly accelerated from a minor storm to a category 4 event in just two days.

This deadly intensification was aided by unusually hot ocean temperatures along much of Beryl’s path, scientists say, with seawater heated by the climate crisis helping provide the storm with extra energy over the past 10 days.

“Beryl would be astounding to happen anyway, but for it to form in June is completely unprecedented,” said Brian McNoldy, a climate scientist at the University of Miami. “It’s just remarkable to see sea temperatures this warm.

“I don’t think anyone would expect an outlier like this to happen, it exceeded expectations. With a climate-change influenced ocean, we are making extreme storms like this more likely to happen.”

Source: The Guardian International

6. Scrubbing websites before greenwashing rules

In other news, Canadian oil companies, lobby groups and third-party advertisers are scrambling to scrub their websites clean of carbon capture claims likely to fall afoul of new greenwashing rules.

The revealing actions suggest the companies lack (and know they lack) evidence to support the stories they have been selling. Fines of up to $10million could be slapped on companies found to be misleading the public with false environmental claims under the new amendments.

DeSmog recently reported that a coalition of Canadian tar sands producers — the Pathways Alliance— had scrubbed its website of all content on June 19, in anticipation of changes to Canada’s Competition Act [...] Pathways Alliance had been proposing a massive carbon capture and storage (CCS) project in Alberta as its principal climate change mitigation strategy. Over the past year, the organization has engaged in a national media blitz promoting its project — including advertising on buses, trams, rental bikes, and bus shelters in Vancouver, Toronto, and Montreal. This advertising campaign used slogans such as “The path to net zero begins with carbon capture and storage” – statements that Canadian environmental groups took issue with as they could be considered misleading or deceptive. 

Emilia Belliveau, Energy Transition program manager with advocacy group Environmental Defence, said in a statement that Pathways Alliance’s action to scrub its website suggests that “they don’t have evidence to support the story they’re selling on carbon capture, and that its member companies’ business plans don’t align with a net-zero future.” 

Ka kite ano

Bernard and Cathrine

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The podcast above of the weekly ‘hoon’ webinar for paying subscribers features co-hosts Bernard Hickey and Peter Bale talking with:

* The Kākā’s climate correspondent Cathrine Dyer talking about the National-ACT-NZ First Government’s climate strategy ‘pamphlet’, its watering down of Clean Car Standards and its general lack of coherence;

* University of Otago Foreign Relations Professor Robert Patman and special guest Helen Clark talking about the NATO summit, the debate about Aotearoa joining AUKUS II and how MFAT, DPMC and security establishment officials often try to push us back closer to our former ANZUS partners; and,

* Greater Auckland Director and former NZTA-Waka Kotahi Director Patrick Reynolds talking about the Government’s ‘Going for Housing Growth’ strategy and its new approach on Transport.

The Hoon’s podcast version above was recorded last night during a live webinar for over 150 paying subscribers and was produced by Simon Josey.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, we’re able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing.)

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The podcast above of the weekly ‘hoon’ webinar for paying subscribers features co-hosts Bernard Hickey and Peter Bale talking with:

* The Kākā’s climate correspondent Cathrine Dyer about the National-ACT-NZ First Government’s moves this week to take farming out of the ETS and encourage more mining and oil and gas drilling;

* Robert Patman about the visit by China’s Premier Li Qiang to Wellington yesterday this week, what it means for Aotearoa-NZ’s relations with our largest trading partner, and whether we can (or should) join AUKUS II; and,

* Politico Europe contributing editor and columnist Paul Taylor about the swing to the right in European Union elections this week and French President Emmanuel Macron’s surprise decision to call Parliamentary elections after his party lost badly in those elections.

The Hoon’s podcast version above was recorded last night during a live webinar produced by Simon Josey.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, I’m able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing.)

Other things we did elsewhere

We produced an episode of When The Facts Change via The Spinoff, including this interview recorded on May 27 with Reserve Bank Chief Economist Paul Conway in the immediate aftermath of a surprisingly hawkish monetary policy statement, and just before the Budget.

We talked about where the inflation is coming from, why interest rates are staying high for longer than anyone expected, and whether the blunt instrument of the Official Cash Rate can affect this extra sticky inflation.

We also produce the 5 in 5 with ANZ daily podcast and Substack for ANZ Institutional in Australia, free to all via Spotify. Apple and YouTube

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: Here’s the top six news items of note in climate news for Aotearoa-NZ this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:

* This week, the coalition Government announced moves to ensure Agriculture does not enter the Emissions Trading Scheme (ETS) next year.

* Instead, they will launch a new industry consultation process, run entirely by pastoral sector participants who will recommend what, if any, contribution the sector should make to reducing Aotearoa’s greenhouse gas (GHG) emissions.

* The former Chief Science Advisor to the Ministry for Transport claimed that the government was “not even pretending to try” as the number of things he was asked to comment on ‘declined dramatically in the past six months”.

* Meantime, Resources Minister Shane Jones threatened to lock-in offshore oil exploration and mining by calling for long-term contracts that would prevent any future government from reversing licenses for decades to come.

* Last month, Prime Minister Christopher Luxon committed to emissions budgets out to 2030, making them one of nine Cabinet-approved government targets. The current plan is to make up for any domestic emissions shortfall by purchasing international offsets.

* However, Treasury is still failing to account for the cost of these ‘constructive obligations’ in the Government’s financial statements. This situation allows a substantial obligation on taxpayers to grow in the dark, while climate policy that might have reduced it is being axed in broad daylight. Worse, the purely temporary savings that come from axing climate policies are being counted... toward the budget needed for tax cuts.

(See more detail and analysis below, and in the video and podcast above. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. A win for farmers backed by a clichéd narrative

The big climate news in Aotearoa this week is the Government’s announcement that they will be introducing new legislation this month to ensure that agricultural emissions (including the on-farm emissions of agriculture, animal processors and fertiliser companies) are not priced in the ETS in 2025.

Instead, the government will disband the latest consultation process, He Waka Eke Noa, and launch a new consultation process -  one run entirely by pastoral sector participants, to consider approaches to tackling biogenic methane emissions. In other words, the sector itself will be invited (again) to consider what, if any, contribution they would like to make to reducing emissions.

According to Agriculture Minister Todd McClay, “New Zealand farmers are some of the world’s most carbon-efficient food producers” and “It doesn’t make sense to send jobs and production overseas, while less carbon-efficient countries produce the food the world needs”.

This assumes that the ‘food the world needs’ is KitKat bars and other packaged food items industrially produced in Chinese factories using the milk solid ingredients which are the primary agricultural export of New Zealand farmers. To be fair, nobody can say exactly what food products those milk solid exports end up in, because milk powder is sold at auction as a bulk commodity item whose ultimate destination is not tracked. However, it is quite likely that farmers’ commodity dairy exports contribute more to the world’s obesity problem than they do to the world’s food insecurity solution.

The narrative of ‘world’s most efficient producer’ is also arguable according to Dr Sebastian Gehricke, Director, Climate and Energy Finance Group and Senior Lecturer at University of Otago, Ōtākou Whakaihu Waka,

“I have heard the referral to New Zealand farms being the most carbon emission efficient in the world many times. First question one should ask to understand this is, where do those numbers come from? Who funded the research? And if you look at the limitations of the research, would we draw the same conclusions? Even if we are ‘some of the most carbon-efficient’ we are still emitting huge amounts of greenhouse gases as a country.”

Furthermore, Dr Gehricke adds,

“If the government wants to avoid farms being ‘shutdown’ a more effective mechanism may be removing exotic forests from the ETS.”

The ACT party welcomed the announcement, with ACT Rural Communities spokesman Mark Cameron claiming that “"under Labour and the Greens, farmers were being lined up as a sacrifice to the climate gods".

A rational and balanced treatment of the agricultural sector would base decisions on both its contribution to the economy and rural livelihoods, as well as what it extracts from the economy, society and environment as a result of its contribution to water and air pollution. Previous studies have suggested that this balance may be net negative for the country. Like any policy decision, this one will produce winners and losers. If you identify as a loser, please let us know in the comments which gods you will be appeasing with your sacrifice.

The government’s work on addressing the other half of Aotearoa’s greenhouse gas (GHG) emissions also continued apace this week. Around 40% of New Zealand’s emissions come from the energy and transport sectors, according to Christopher Luxon.

2. “Not even pretending to try”

The former chief science advisor for the Ministry of Transport and Professor of Human Geography at Canterbury University’s School of Earth and Environment, Simon Kingham claimed that while “the previous government was working to reduce transport emissions, the current government is not even pretending to try”. In a report by Liz Kivi in Carbon News this week, Kingham was quoted:

There is a long list of transport emissions reduction policies that the coalition government has binned.

“They’ve cut back the Clean Car Discount, reduced the Road User Charges exemption for EVs, they’re winding back the Clean Car Standard, reducing funding for public transport, reducing incentives for walking and cycling, they’re building more roads which increases emissions, they’re encouraging density but also encouraging sprawl, which induces demand."

Kingham says his final months in the advisory role were challenging as his advice was sought much less under the coalition government. “The number of things I was asked to comment on has reduced drastically in the past six months.”

Last month climate change minister Simon Watts told Carbon News that he supported the current target of reducing transport emissions by 41% by 2035 but experts, including Kingham, are sceptical about how that target will be met under the new policy direction [....]

Kingham says he doesn’t know where Transport Minister Simeon Brown is getting his advice.

“I don’t know anyone in the research community who thinks what he’s doing is a good idea. It would be interesting to know if there was someone.”

3. Oil exploration and mining could be locked in for decades

Meantime, Resources Minister Shane Jones is seeking to lock-in off-shore oil exploration and mining by calling for long-term contracts that would prevent any future government from reversing licenses for decades to come. Politik reporter Richard Harman writes:

“Jones sees a precedent in the original 1973 Maui gas contract, which saw the Crown not only become a 50 per cent shareholder in the Maui field but also commit to purchasing a substantial amount of gas from the venture each year

[...] Most notably, he announced that the former Labour Government’s last-minute amendment to the Mining Act in July last year, which limited the Government’s role to “managing” mining, would now revert to its original wording to “promote” mining.

It is in that context that Jones wants to see long term contracts in place with any successful gas explorer.

“I think it’s time that we reprise the old Maui gas contract,” he told POLITIK.

 “Who is going to invest in New Zealand’s gas industry in the absence of a solid contract on the other side?

 “In the recent past, users of gas have been disincentivised from relying on gas.

 “So if you’re a big investor on the supply side and you’re going to spend hundreds of millions, you want an ironclad guarantee that there’s 20 to 30 years worth of utilisation.

 “I’ve thought for a long time that suppliers must have the confidence despite any change of government that they will have customers and I think that’s really what promote has to mean.”

Jones said any contract could go out to 2050”. Politik

4. Taxpayer obligations quietly blooming in the dark

Last month, Prime Minister Christopher Luxon committed to net emissions budgets of no more than 290 megatonnes from 2022 to 2025 and 305 megatonnes from 2026 to 2030 as one of nine Cabinet-approved government targets.

The current plan includes purchasing international emissions offsets to make up for shortfalls in domestic emissions reductions. The most recent Treasury estimate puts that figure at $4-9 billion dollars, but it could go up.

While international accounting orthodoxy now views emissions reduction targets as ‘constructive obligations’ for which there ought to be a provision (liability) in financial statements, the New Zealand Treasury continues to fail to account for it in the Government’s financial statements.

That allows a substantial obligation on taxpayers to grow in the dark, while climate policy that might have reduced it is bring axed in broad daylight.

Worse, the purely temporary savings that come from axing climate policies are being counted... toward the budget needed for tax cuts.

5. A UBI for everyone from a global emissions tax?

Meantime, there is one policy that could eradicate global poverty, more than double global GDP and reduce environmental degradation all at the same time, should anybody be interested. An analysis published in the journal Cell Reports Sustainability suggests that basic income provided as regular cash payments to the entire world population could be funded by charging carbon emitters with an emission tax.

“We are proposing that if we can couple basic income with environmental protection, we can save two birds with one stone,” says first author U. Rashid Sumaila of the University of British Columbia in Vancouver.

Sumaila has been working on ending harmful fishery subsidies worldwide, but many people who rely on fisheries for their livelihoods, especially those in developing countries, say they need the subsidies to support their families. “One of the ways we can deal with this is to give the people basic income. With that, we could achieve sustainability goals without compromising people’s livelihoods,” he says.

The research team estimated that it would cost $41 trillion to provide the entire world population of 7.7 billion people with a basic income, or $442 billion to fund only 9.9 million people living below the poverty line in less developed countries. In return, giving basic income to the entire world population could boost the global GDP by $163 trillion, which is about 130% of the current GDP.

Every dollar spent on implementing basic income can generate as much as $7 in economic impacts, the analysis shows. “If you give someone one dollar, they will spend part of the money to buy food or pay rent. And people that are paid for the food and accommodation will use part of this for their own consumption and so on. The dollar will trickle up throughout society. Our calculations show that the economic impact of that dollar will be much greater than its original amount,” Sumaila says. EurekAlert!

Are those crickets I hear?

6. Green agenda falters in EU, and more overseas

Other news in climate politics overseas this week:

* Adam Tooze, in his substack Chartbook, discusses the shock delivered by EU elections. He claims they have “tilted the European political balance against the green agenda which has served as an important reference point for politics in Brussels for the last five years” as well as prompting France’s Macron to declare a snap election.

“Even if Ursula von der Leyen succeeds in her bid for a second term as Commission President, she will not be pursuing the full-throated green-forward policy that launched the Green Deal in 2019 and Next Gen EU in 2020. This does not mean that the EU will adopt a climate-skeptical position. But priorities will shift and difficult trade-offs will be avoided. There is a groundswell of opinion in Europe that is preoccupied with the cost of living, wants to keep its internal combustion-engined cars and sympathizes with farmers in their opposition to green regulation. That grouping will now have a much louder voice.” Chartbook

* Barbara Grady compares the stark differences in climate policies between Biden and Trump on Yale Climate Connections, pointing out that “[U]nder Biden’s policies, the U.S. is on track to cut its climate pollution in half by 2030. Trump and his allies aim to gut those policies and downsize the EPA.” Yale Climate Connections

* Mexico elected as President an environmental scientist who has previously co-authored a UN Intergovernmental Panel on Climate Change (IPCC) report. But will she be a climate president? Martha Pskowski at Inside Climate News suspects not so much:

“Sheinbaum’s predecessor, outgoing President Andrés Manuel López Obrador, cut funding for environmental agencies and let Mexico’s international climate commitments languish. He backed more domestic oil production and the construction of a new refinery. 

Sheinbaum remained his loyal ally; López Obrador paved the way for her to ascend to Mexico’s highest office. But on energy and climate issues, while his protegé strikes a different tone, she remains committed to continued use of fossil fuels.

Sheinbaum’s campaign platform commits to the nation’s energy transition, electrifying transport and reducing Mexico’s greenhouse gas emissions. Yet she also supports a recently constructed oil refinery, natural gas pipelines and petrochemical plants. She champions domestic oil production but is largely silent on natural gas, for which Mexico is highly dependent on the United States. “ Inside Climate News

Ka kite ano

Bernard and Cathrine

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: My six things to note in Aotearoa-NZ’s political economy around housing, climate and poverty on Wednesday, June 12 were:

* The Government exempts farm emissions from the ETS, but announces $400 million of subsidies for farmers to reduce emissions by an indeterminate amount over no particular time period. No analysis was released of the impact on Aotearoa-NZ’s climate emissions, our Paris liability or the impact on trade deals requiring us to meet our Paris goals, which we’re currently on track to miss badly.

* The Ministry of Justice has watered down a draft code of conduct for lobbyists so much it’s now meaningless, say transparency and civil liberties watchdogs.

* Weeks ahead of the removal of the 11.5c/litre fuel levy in Auckland, the Commerce Commission publishes a study showing fuel companies put up petrol prices (but not diesel prices) faster when costs rise than they cut prices when costs fall. The Commission estimated this ‘rockets and feathers’ pricing cost drivers $15 million/year, which was kept as higher profits by the almost-all-overseas-owned firms. (See more detail and charts from the study below)

* Thousands of Wellingtonians are homeless, forcing some to squat in dangerously dilapidated quake-damaged buildings. (See more below in quotes of the day)

* RBNZ figures show banks’ collective net profit from interest on loans and deposits has risen by a collective $9.1 million per day since the RBNZ started hiking interest rates in late 2021 as they keep more interest than they pay out. The tighter monetary policy has increased savers’ incomes by a collective $73 million per day to $120 million per day. (See more below in charts of the day)

* Spikes in global temperatures in May and June are concerning climate scientists, but huge drops in solar panel and battery costs are ramping up adoption of renewable electricity generation. It’s race Aotearoa-NZ is observing, rather than participating in actively at the moment. (See more below in climate charts of the day)

(Paying subscribers can see and hear more detail and analysis below the paywall fold and in the podcast above. We’ll open up the full article for public reading, listening and sharing if we get over 100 likes to indicate approval from paying subscribers. Update. Achievement unlocked!)

Six things to note this morning

1. Farmers get ETS exemption AND new subsidies

Climate & Politics: Trade and Agriculture Minister Todd McClay and Climate Change Minister Simon Watts yesterday announced the Government would amend the Climate Change Response Act (2002) to take farmers out of the Emissions Trading Scheme (ETS) permanently.

They also announced the abandonment of the He Waka Eke Noa (HWEN) joint consultation process set up by the previous Labour Government in 2019 on how to bring farmers into the ETS, as was legislated to happen from January 1, 2025. Instead, they said, the Government would establish a Pasture Sector Group to work on reducing biogenic methane that would include DairyNZ, Beef + Lamb New Zealand, Deer Industry New Zealand, Federated Farmers, Dairy Companies Association of New Zealand, and the Meat Industry Association, but not iwi, Government agencies or environmental groups, who were in HWEN. Links on the Ministry for Primary Industries web sites to HWEN are now dead.

Watts also announced the Government had committed $400 million over the next four years to accelerate the commercialisation of tools and technology to reduce on-farm emissions, including scaling up funding for the New Zealand Agricultural Greenhouse Gas Research Centre, where an additional $50.5 million would be invested over the next five years to find solutions to reduce the sector’s emissions.

There was no mention of whether the Government had analysed the decision’s impacts on Aotearoa-NZ’s climate emissions, or further increased its liability for buying overseas credits under the Paris Agreement, or how failing to meet or reneging on the Paris Agreement would affect trade, given achieving our Paris goals was written into our Free Trade Agreements with Europe and the UK.

In my view, that apparent decision to ignore or not even investigate the economic implications for trade, emissions and the Crown’s liabilities is a financially and economically reckless act. The decision to exempt farmers but also increase subsidies also begs questions about corporate welfare for farmers, but not for other businesses or consumers, given the removal of subsidies to buy electric vehicles and to install electric boilers in factories.

2. Fuel companies overcharging by $15 million per year

Costs of living, climate and politics: On the eve of the June 30 removal of the 11.5c/litre Auckland Regional Fuel Levy, the Commerce Commission announced yesterday it had published a study showing ‘rocket and feather pricing’ by fuel companies mean consumers are over-charged by around $15 million a year. It warned fuel companies to pass on the removal of the levy much quicker this time around.

The Commerce Commission also described it as ‘asymmetric cost pass-through’:

Asymmetric cost pass-through relates to a form of pricing behaviour that, while not an explicit sign of collusion, has been linked to firms exercising market power. This allows firms to inflate profit margins (most notably in the short term) at the expense of consumers, by pushing cost increases onto prices faster than cost decreases.

Cost pass-through asymmetry has been widely evaluated in related literature with a specific term, rocket and feather pricing, being attributed to a specific kind of behaviour. This term refers to how prices may rise quickly like a rocket when costs increase but fall slowly like a feather when costs decrease.

The result of asymmetric pass-through is an inflation of firms’ profit margins. Commerce Commission study.

The Commission analysed Gaspy and MBIE data from January 2019 to November 2023, finding evidence of asymmetry in the speed of cost pass-through, albeit only for regular 91 and premium, but not for diesel, possibly because diesel buyers were mostly commercial and compared prices more aggressively and regularly.

For Regular 91 and Premium 95, asymmetric pass-through can be seen both contemporaneously in the week of the cost change and in the first week following the cost change. Only about a third of a cost decrease is passed through after one week; in contrast, 70-80% of a cost increase is passed through in the same time frame. The difference between pass-through rates is statistically significant in the first week. This is not the case after two weeks as the response functions trend closer. Asymmetry then disappears for both fuel types.

The effect of this asymmetry is an inflation of firm margins in the short term. In the initial weeks following a cost decrease, the slow pass-through results in a larger gap between cost and price. Over time this fades away.

In contrast to other fuel types, the diesel market appears to operate as would be expected in a workably competitive market, with no statistically significant asymmetry.

A possible explanation for the difference in cost pass-through between diesel and the two petrol fuels may stem from differences in market composition combined with consumer behaviour. A much higher proportion of diesel buyers is commercial users than is the case for petrol, which is predominantly a retail market. To the extent that retail consumers may undertake less searching for better prices, particularly around times of high cost, this could result in a greater degree of asymmetric pass-through in relation to petrol.16 This is because if petrol consumers are less likely to search for lower prices, there may be less pressure to pass on cost decreases when compared to diesel, resulting in the difference in asymmetry observed.

3. Lobbying code dribbles away into meaninglessness

Politics: Rob Stock reports this morning for The Post-$$$ on the latest from the Ministry of Justice’s consultation on a draft code of conduct for political lobbyists, which the Civil Liberties Council and Transparency International said had now been chipped away through the consultation process to be practically meaningless, as this summary of feedback published last month shows.

“This is exactly the self-interested lobbying that the ministry should have been guarding against, not giving in to. When claims are made that there is no evidence of lobbying improperly changing government work, this is a prime example to contradict such claims,” the Council for Civil Liberties has told the ministry.

“Their aversion to even voluntary and non-binding ethical behaviours makes the case stronger for mandatory lobbying regulation.” Transparency International said.

4. Quotes of the day

‘Squatters in dangerous buildings are an indictment’

Speaking after a squatter fell down a broken stairwell in a quake-abandoned office tower in Wellington, Wellington’s City Missioner Murray Edridge said around 200 people were visibly homeless in our capital city, with thousands more ‘hidden homeless’ and forced to live in caravans, sheds, cars, and crowded into houses with friends, families and others.

“Most people would not consider living in a derelict, risky building. You've got to presume that this was the best option that he had at the time.

"It's getting colder, it's getting wetter, and people are looking for shelter. They're choosing buildings that clearly aren't safe to be occupied."

"The very fact that we've got people seeking shelter in unsatisfactory premises is an indictment."

"There will also be a subset of people who are trying to find shelter and dry accommodation anywhere they can, so I suspect this is not a unique issue that we saw this morning."

"It's the people living in caravans, and sheds, and cars, and crowded into houses.

"We need to say, 'do we want people living in this set of conditions?'

"Or are we prepared to say 'this doesn't happen in our city', and what are we prepared to do collectively to ... provide some appropriate level of accommodation for everyone who needs it." Wellington City Missioner Murray Edridge via RNZ’s Lauren Crimp, reporting on a case yesterday of a squatter in a derelict office building in Wellington falling three storeys down a broken stairwell and now in a critical condition in hospital. The building was deemed earthquake prone after the 2013 Seddon earthquake.

5. Charts of the day

How monetary policy works to inflate bank profits & enrich savers

RBNZ figures (S20) show banks are receiving an extra $6.6 billion in interest payments from households and businesses every 90 days since the RBNZ starting putting up interest rates in late 2021, and they’re paying out an extra $5.8 billion in interest to savers and depositors every 90 days.

That means their net interest income or profit from lending and deposits has risen by a collective $820 million per 90 days, or close to $9 million per day more a day to a total of around $3.9 billion per 90 days, or around $43 million per day.

6. Climate chart of the day

This should be the front page of the NZ Herald

6a: Good news climate charts of the day

Collapsing solar and battery costs are turbo-charging renewables

Cartoon of the day

‘Forward the Light Brigade. Charge for the guns’

Timeline-cleansing nature pic

Dappled light

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The six things to note in Aotearoa-NZ’s political economy around housing, climate and poverty in the past day to 8:36 pm on Monday, June 10 were:

* 20,000 protested against the Fast-track approval bill on Saturday in Auckland, but PM Christopher Luxon says ‘sorry, but not sorry’ about the need for faster development. Shane Jones says: “We have to mine our way to the future.”

* Jones announced a reversal of the Labour-Green ban on offshore oil and gas exploration and plans to water down cleanup rules.

* Analysis of official documents on the Government’s $2.9 billion of income tax cuts in Budget 2024 show that 64% of the cuts go to the top 40% of taxpayers.

* National has reneged on its promise to fully fund a rollout of 10,000 EV charges, budgeting for just over a third of the promised $257 million over four years.

* The Government is likely to announce its finalised policy of keeping agriculture out of the emissions trading scheme ahead of Fieldays this week, BusinessDesk reports this morning.

* MSD and Corrections are using some of the 40 boarding houses in Auckland that council inspectors have deemed are operating illegally.

(Paying subscribers can see and hear more detail and analysis below the paywall fold and in the podcast above. We’ll open up the full article for public reading, listening and sharing if we get over 100 likes to indicate approval from paying subscribers. Update: achievement unlocked!)

Six things to note this morning

1. ‘We have to mine our way to the future’

Climate & Politics: An estimated 20,000 marched down Queen Street on Saturday afternoon in protest against the Fast-track Approvals bill deemed a March for Nature. Prime Minister Christopher Luxon dismissed the protest, saying things needed to get built and foreign investment needed to be encouraged, while Resources Minister Shane Jones described the protestors as ‘shrill banshees’ and said: “We have to mine our way to the future.” See more in Quotes of the day and Sign of the day below.

2. ‘Come back. We’ll make cleaning up cheaper for you’

Climate & Politics: Jones announced yesterday plans to legislate in the second half of this year to reverse the previous Government’s ban on offshore oil and gas exploration and to make it cheaper and easier for foreign investors to clean up messes afterwards. He said gas reserves had fallen and the removal of the ban, as promised in the coalition agreement, was needed to ‘keep the lights on.’

The details in this MBIE document show plans for legislative amendments to the Crown Minerals Act:

* to make it cheaper for drillers to hold securities against future cleanup costs ‘in a way that is cost efficient and best suits a permit holder’s circumstances’;

* to limit the ‘trailing liability’ for clean-up costs to the most recent transferor;

* to remove ‘the requirement to make payments or provide a financial security in anticipation of difficult to quantify, future risks’;

* to remove the 2018 ban on ‘accessing some Taranaki conservation land for petroleum activities other than minimum impact activities’

* to change the current competitive tender process for drilling rights to include the option of a non-tender or ‘priority in time’ method used before 2013;

* to specifying the Minister’s purpose under the amended Act be changed from ‘managing’ prospecting, exploration and mining to ‘promoting and attracting permit applications; and,

* to introduce a new ‘Tier 3’ mining permit ‘to undertake small-scale non-commercial gold mining sometimes referred to as ‘hobby or recreational mining’.

3. Most tax cut money going to top 40% of income earners

Poverty: Analysis of Treasury and IRD figures in their Regulatory Impact Assessment document for the Government’s $2.9 billion of income tax cuts in Budget 2024 shows that 64% of the cuts go to the top 40% of taxpayers after the inclusion of extra income for rental property investors, University of Auckland tax and poverty researcher Susan St John has found, via The Daily Blog.

The top 2 quintiles (40% of households) gain $1.6 billion or 55% of the total.  But they also benefit by $750m a year from the landlords’ tax reduction. When that is included, they get 64%, by far the lion’s share of the total.  What is so shocking is that the lowest quintile gets just 5.4% of the total.  About 130,000 households get nothing at all and 8000 are slightly worse-off.

No one seems to have worked out how the many spending cuts will be distributed, but increased transport costs, prescription charges, lower quality school lunches will hurt the poor most. We know that rents are rising along with rates and insurance. Cut-backs to budget advisory services and foodbank funding increase the misery along with changes to price indexation for benefits and an inadequately adjusted minimum wage.

Remember, the worst-off families get no tax relief in this budget and miss out on the IWTC (in-work tax credit) because they are on benefits. The IWTC payment (which assist with the costs of raising children) is now nearly $100 per week for 1-3 children with an extra $15 a week per additional child.  In this recession, as low-income families lose work, as they will, they also lose $100 per week (more for larger families) for their children. Susan St John via The Daily Blog. 

4. ‘10,000 EV chargers set to be National’s Kiwibuild’

Another broken promise has emerged from the depths of Budget 2024. 1News’ Jacob Johnson reported last night with confirmation from Transport Minister Simeon Brown and comments from Green MP Julie-Anne Genter that National pledged $257m over 4 years to deliver 10,000 EV chargers, but this year's Budget only allocated $95m over the same time period.

Transport Minister Simeon Brown said a new plan is being developed as part of the coalition agreement with Act.

"We're currently working through a new funding model around how we can maximise private sector investment in EV charging so we can grow those numbers."

More decisions on how that will work will be made later in the year.

"There is a role for Government to support, and so we want to make sure we're doing that in the right places and getting value for money for taxpayers," Brown added.

Genter said the Government’s entire climate change policy hinged on getting the chargers installed.

"This might end up being National's KiwiBuild. They've set a very ambitious target, but they're not putting in place the policies to support it or the funding." Julie-Anne Genter

5. National set to tell farmers they can stay out of ETS

The National-ACT-NZ First Government is likely to announce its finalised policy on keeping agriculture out of the emissions trading scheme ahead of Fieldays, BusinessDesk-$$$’s Riley Kennedy reported this morning.

Sources have said the government will confirm agriculture won’t enter the ETS, it will officially kill (He Waka Eke Noa) HWEN and a new pastoral-focused group will be formed as opposed to having other parts of the sector, such as horticulture, involved.

6. MSD using illegal boarding houses in Auckland

Auckland Council’s housing inspectors wrote in their annual report (page 11) delivered to the council last week that 40 out of 44 of the boarding houses it inspected were operating illegally and that several were being actively used by MSD’s WINZ and Corrections. Some were being run by larger commercial operations that were using the courts to block inspections and some were gang-affiliated, the Proactive Boarding House Inspection Programme reported.

Due to the shortage of bed space these agencies struggle to find appropriate accommodation at short notice. With no official register of boarding houses, agencies find it difficult to know whether a property is legal or compliant. We have established relationships with several stakeholders such as Police and the Department of Corrections around housing individuals that may pose a risk to a community. Most agencies try to use established premises that they know, but the shortage of such premises is a challenge.

Several properties were found to be large, converted houses or multi-unit complexes ranging from five to 27 rooms. Whilst the living conditions were satisfactory, the buildings themselves did not meet the required building standards for sleeping accommodation. Primarily this relates to fire safety and building performance requirements.

An increasing number of accommodation providers are involved with a portfolio of properties. These are typically run as a business or commercial enterprise. We have encountered increased resistance from these larger-scale operators. This has ranged from refusal to permit entry or challenging the basis of our assessments, findings, or legislative interpretation.

More often these cases are resulting in applications (initiated by the operator) for determination from MBIE. Determinations are currently taking many months to decide.

We have 14 cases under investigation or that require further corrective action from the property owners / operators. Auckland Council Proactive Boarding House Inspection Programme annual report (pages 11-14)

Quotes of the day

‘Just shrill banshees’

“I just think it’s more of this green banshee-like shrillness that sadly we hear far too much of. The protest is predominantly a Green Party recruitment device. It’s ideological hyperventilation.

“There are always risks in environmental decision-making but we can no longer pretend that saving every bat, every multicoloured skink or Freddy and his whānau is a costless exercise.

“My position is that we have to mine our way to the future.” Resources, Oceans and Fisheries and Regional Development Minister Shane Jones via Waikato Times-SST

‘Sorry, not sorry’

“Sorry, I'm not making any apologies. We are going to get things built in this country, because it's taking way too long. It’s one of the reasons we haven’t received our fair share of foreign direct investment.” PM Christopher Luxon via Waikato Times-SST

‘Goodbye Kauri and virgin native forest’

“When he says that kind of thing, what he’s meaning is we shouldn’t give a s**t about the natural world

“Most New Zealanders, regardless of where they sit on the political spectrum, are so proud of our natural resources and environment and won’t stand for mining it, and I’m so proud of us for that.

“Goodbye Freddy Frog? Goodbye Hector’s dolphin, goodbye tuatara, where does it stop? Goodbye kauri tree, and virgin native forest.” Actor and activist Robyn Malcolm via Waikato Times-SST

‘They’re voting with their feet’

“I love our heritage as nation of migrants, and I’ve told a version of that story many times. The problem is, people are now voting with their feet, and they’re not voting New Zealand.” ACT Leader David Seymour in a speech over the weekend.

Sign of the day

Chart of the day

How to spook a housing market

Climate chart of the day

Less heat going out, means more heat staying in

Cartoon of the day

$50 million shared across 5 million

Timeline-cleansing nature pic

‘I caught it. Again!’

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: On reflection, the six things to note in Aotearoa-NZ’s political economy around housing, climate and poverty this week were:

* The Government-driven freeze in building new classrooms, local roads and water networks in order to save cash for tax cuts is frustrating communities facing massive population growth that has not been planned or invested for;

* Backlashes to Budget 2024 decisions breaking various pre-election promises on cancer drugs, first home buyer grants and sick leave are set to deliver more opinion poll body blows to the Government in coming days;

* Dying cancer patients accused the Government of breaking its election promises as GPs reported the percentage of their patients declined specialist appointments increased;

* Other central banks began cutting interest rates, but the Reserve Bank is being forced to keep mortgage rates high because high population growth without enough housing is pumping up rents, just as Government moves to save cash for income tax cuts is pumping up rates, fees and charges;

* The UN called for a ban on fossil fuel advertising and a windfall tax on fossil fuel firms as data showed May was the planet’s 12th consecutive hottest month on record, while Simeon Brown took fresh steps to water down emissions rules for car imports that could further increase our climate emissions financial liabilities; and,

* In good news, China’s climate emissions have begun falling as its production of cheap solar panels, batteries and EVs hits fever pitch, creating an opportunity for Aotearoa-NZ to quickly electrify our economy with panels, batteries and EVs that are effectively subsidised by Chinese, US and European consumers and Governments.

(Paying subscribers can see and hear more detail and analysis below the paywall fold and in the podcast above. We’ll open up the full article for public reading, listening and sharing if we get over 100 likes to indicate approval from paying subscribers. Update: achievement unlocked.)

Six things of note this week

1. Many more people for too few schools, roads & hospitals

Housing: Frustration in suburban and regional Aotearoa-NZ is growing at the short-termist ‘penny wise and pound foolish’ decisions from the Government and councils to cut back on transport, housing, water and education construction investment to save money this year to pay for tax cuts and to limit rates increases and protect AA credit ratings.

Examples abound of communities being told to build new homes to accommodate the extra 200,000 people who have arrived in the last two years, but that there is ‘not enough money’ for the classrooms, pipes, roads, buses and homes needed to accommodate everyone, let alone do that in a healthy and affordable way.

There’s ‘not enough money’ because politicians from both sides magically believe and promise they can  deliver public services, keep Government small and cut income taxes all at the same time. That’s just not possible when all over the world health and education costs keep growing faster than the rest of the economy because of ageing populations and rapidly expanding and improving treatments and devices.

This circle cannot be squared without either reducing the promised public services or increasing the tax to GDP share to closer to 35-40% that other developed peers have as their base.

The obvious missing piece in our tax puzzle is a tax on income from capital gains, especially the unearned income from rises in residential land values.

2. The coalition’s Wile E. Coyote moment

Politics: Political support for the Christopher Luxon-led National-ACT-NZ First Government feels as if it’s in a Wile E. Coyote moment - legs cycling in mid-air off a cliff - before the first post-budget opinion polls hit. They can’t be far away, possibly as early as Sunday or Monday.

The Government delivered a politically awful series of broken election promises and nasty election surprises through the Budget 2024 process, including the non-delivery of cancer treatment drugs, the shock removal of first-home-buyer subsidies and the neutron-bomb like economic effects of the freezing of funding and approval for multiple Government and council-backed development and building projects.

The polls through February to May inclusive showed a collapse in support for the Government, along with slumps in business and consumer confidence, meaning a couple of the polls showed it possible for Labour-Green-Te Pāti Māori to govern if replicated in an election.

The first polls after the Budget could easily ramp up the pressure on Luxon, who remains personally unpopular with public and is facing growing unease from his caucus and National party grandees, who worry he has unnecessarily and naively allowed Winston Peters and David Seymour to drag what they expected would be a centrist and conservative Government into extreme and unpopular territories. I still think Luxon will be rolled by Christmas if he doesn’t turn around those voter perceptions the Government is drive by extremist tail-wagging-dog politicians.

One politically positive development for the coalition this week has been the messy emergence of allegations and now multiple official investigations into TPM’s use of Census and (possibly) vaccine and Oranga Tamariki data to win votes for Tamaki Makaurau MP Takutai Tarsh Kemp, who beat Labour’s Peeni Henare by 42 votes. TPM have denied the allegations. This has the potential to not just change the make-up of Parliament, but poison relations between Labour and TPM, and serve as a distraction from the Government’s own problems.

3. A health system in crisis as promises are broken

Health: Dying cancer patients and cancer doctors accused the Government in an open letter of breaking its election-winning promise to fund new drugs in Budget that would keep more alive for longer.

Meanwhile, General Practice NZ and University of Otago public health researchers reported a rise in the number of patients who they referred for specialist help, but were declined because the hospital system is understaffed, underfunded and in severe stress.

A Mental Health and Wellbeing Commission report this week found a rise in severe psychological stress, but less specialist treatment for the mentally ill.

Bi-partisan commitments over at least the last 20 years to cap the size of Government at or below 30% of GDP are putting bi-partisan promises of freely available state-funded hospital care and education under extreme pressure, especially with the 1.5-2% population growth enabled by an effectively bi-partisan policy of importing low-paid temporary migrants to generate nominal GDP growth, instead of investing savings in productivity-enhancing infrastructure, R&D, upskilling staff and business investment.

Instead, surpluses are invested in leveraged residential land because the after (no) tax returns on equity are many-multiples higher than other investment choices here.

4. Rate cuts start, but not in NZ, despite extended GDP slide

Economy: The ECB and the Bank of Canada cut their official rates this week. The US economy generated more jobs than expected, while NZ unemployment kept rising and residential building fell.

Our Reserve Bank isn’t expected to start cutting until next year, even though unemployment is rising and Aotearoa-NZ is experiencing its deepest per-capita recession since the GFC. That’s because domestic inflation is staying higher for longer, in part because of our broken housing market and increases in government and council fees, rates and charges.

5. ‘Ban advertising by the “godfathers of climate chaos”’

Climate: May was the 12th consecutive hottest month on record, Copernicus reported. The UN called for a ban on fossil fuel advertising and a windfall tax on fossil fuel firms.

Meanwhile, Transport and Energy Minister Simeon Brown is moving to water down emissions standards for vehicle imports, which is projected to increase Aotearoa-NZ’s emissions by 30 million tonnes and cost the economy $3.5 billion extra in fuel imports and emissions credit costs to meet our Paris commitments.

6. China, US & EU could subsidise our electrification

Good news: Carbon Brief reported China’s climate emissions are falling again for the first time since its covid lockdowns as it ramps up its investment in renewable power generation, solar panel and battery production and electric vehcle production. China’s monumental renewable technology development and production programme has shocked Europe and the United States by its speed, scale and aggression.

The EU and US are set to impose tariffs on imports of said panels, batteries and EVs from China, partly to protect their own industries, but also because the US at least believes it needs to rebuild its industrial base so it can be flipped to military production if a war with China breaks out, as many in America’s military, political and diplomatic classes believe is inevitable towards the end of this decade.

That presents an opportunity for Aotearoa-NZ to massively and quickly electrify our economy cheaply, powered by Chinese-made panels, batteries and EVs. We would effectively be getting Chinese, US and European consumers and taxpayers to subsidise our electrification, which would make us much more resilient and independent in the event of a catastrophic shock to global trade and the global economy. A war over Taiwan or any number of physical and geopolitical shocks caused by climate change would create such shocks.

Quote of the week

“We're fixing it up. As LV Martin used to say, it's the putting right that counts!" Housing Minister Chris Bishop announcing tweaks to the first-home-buyer grant cancellation to allow those already approved to get their grants.

Chart of the week

Climate chart of the week

Cartoon of the week

‘Duped’

Timeline-cleansing nature pic

The last of us?

Mā te wa

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: The podcast above of the weekly ‘hoon’ webinar for paying subscribers features Bernard Hickey talking with:

* The Kākā’s climate correspondent Cathrine Dyer talking about the latest reports on a warming climate and the UN’s call this week to ban fossil fuel advertising;

* Robert Patman talking about the growing disquiet globally over the United States’ support for Israel in Gaza, plus the latest from Ukraine;

* Association of Salaried Medical Specialists executive director Sarah Dalton on the health funding crisis;

* Queenstown Lakes District Housing Trust CEO Julie Scott on social housing and the shortages of housing and transport in and around Queenstown; and,

* Commercial Communications Council CEO Simon Lendrum on the UN call for a boycott of fossil fuel money in advertising, PR and the media.

The six things that mattered in Aotearoa’s political economy that we wrote and spoke about in the Hoon above and via The Kākā and elsewhere in the last week included:

* Politics: Public and media reaction to Budget 2024 zeroed in on National’s breaking of election promises to fund 13 new cancer treatments and 50 new doctor training places, to not cut sick leave and holiday entitlements for part-time workers and to not cut funding for first-home buyer grants. See more in Monday’s email.

* Climate: Transport and Energy Minister Simeon Brown pushing ahead quietly with plans to water down emissions reduction rules for car imports. This move and the already-banned Clean Car Discount scheme could increase Aotearoa-NZ’s climate emissions by 30 million tonnes by 2030, which could cost taxpayers $680 million extra to buy emissions credits overseas, or risk the nation reneging on our Paris climate agreements in a way that would lock our farmers’ exports out of the European and UK markets. See more in Thursday’s email.

* Various cases emerged this week of ‘penny wise and pound foolish’ decisions by the Government to freeze or block funding for water infrastructure and public transport infrastructure that will dramatically slow the building of new homes, in direct opposition to the Government’s avowed ‘going for housing growth policy.’ See more in Monday’s email.

* UN Secretary General Antonio Guterres used the release of key reports this week on the warming climate by the World Meteorological Association (WMA) and the European Commission’s Copernicus Climate Change Service (C3S) to call in speech for a ban on all advertising by fossil-fuel companies, and for media agencies and media companies to stop working for such companies. See more in Thursday’s email. Also, see more in the weekly climate wrap from Cathrine and myself out this morning.

* Calls grew this week for deeper, more wide-ranging and more independent inquiries into Te Pati Maori’s use of data obtained during the Census and covid vaccination programmes by organisations associated with TPM President John Tamihere to promote voting for TPM.

* Ports of Auckland began telling clients last week it plans to increases its peak-time container pick-up fees by 84% to $175 per container. All because the Port has been told by Auckland Council to pay more dividends, again because both flavours of Government won’t fund councils properly for all the population growth Government has enabled. It’s another example of administered prices driving up domestic inflation, which is forcing the RBNZ to keep rates high for even longer.

The Hoon’s podcast version above was produced by Simon Josey. Regular co-host Peter Bale was off this week travelling.

(This is a sampler for all free subscribers. Thanks to the support of paying subscribers here, I’m able to spread my public interest journalism here about housing affordability, climate change and poverty reduction other public venues. Join the community supporting and contributing to this work with your ideas, feedback and comments, and by subscribing.)

Other things we did elsewhere

We produced an episode of When The Facts Change via The Spinoff, including this interview with Flick Electric CEO Luke Blincoe about what really happened during last month’s cold-snap blackout scare.

We go deep into the mechanics of the electricity distribution system and market to look at how to solve the dry winter and cold snap problem without billions of dollars worth of spending on new generation and lines.

We also produce the 5 in 5 with ANZ daily podcast and Substack for ANZ Institutional in Australia, free to all via Spotify. Apple and YouTube

Ngā mihi nui.

Bernard

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe

TL;DR: Here’s the top six news items of note in climate news for Aotearoa-NZ this week, and a discussion above between Bernard Hickey and The Kākā’s climate correspondent Cathrine Dyer:

* New evidence is increasingly pointing at efforts to reduce marine pollution being the main cause of abrupt increases in ocean temperatures experienced since 2023. A new study in the academic journal Nature claims that the abrupt reduction in sulphur aerosols from marine shipping has inadvertently created a ‘geoengineering termination shock’ that could double the rate of warming in the 2020s.

* The findings correlate with warnings from climate scientist James Hansen, lead author of a 2023 article ‘Warming in the Pipeline’ that challenged the consensus position on climate sensitivity and the rate of warming.

* In a commentary published online in May, Hansen pointed out that “ship emissions are a tiny part of total anthropogenic emissions and of emission changes, but ships emit into relatively pristine ocean air and the aerosol effect is nonlinear”.

* Both Hansen and the authors of the new study suggest that the current cloud dimming effects also demonstrate the potential for geoengineering such as marine cloud brightening (MCB) to temporarily offset global warming.

* The dangers of attempting to do so were addressed by Aotearoa New Zealand climate scientist Kevin Tremberth in this Newsroom article earlier this year.

* Another recent study looks at the triple threat posed to oceans from the combined effects of extreme heat, oxygen loss and acidification.

(See more detail and analysis below, and in the video and podcast above. Cathrine Dyer’s journalism on climate and the environment is available free to all paying and non-paying subscribers to The Kākā and the public. It is made possible by subscribers signing up to the paid tier to ensure this sort of public interest journalism is fully available in public to read, listen to and share. Cathrine wrote the wrap. Bernard edited it. Lynn copy-edited and illustrated it.)

1. Less sulphur = dimmer clouds = hotter oceans

New evidence is increasingly pointing to the deliberate reduction in marine pollution being responsible for the abrupt increase in ocean surface temperatures, particularly in the North Atlantic, since 2023.

In the chart below, the dashed lines on either side of the 1982-2011 mean temperature represent a 2-sigma standard deviation. The remarkable 2023/24 temperatures, shown in solid orange/black sit outside the 4-sigma envelope demonstrating the sheer scale of the increase.

According to this article in the American Meteorological Journal, the extreme ocean temperatures experienced since 2023 are more in line with average global warming levels of 3.0˚C than 1.5˚C.

Now, a new study published in the journal Nature last week, claims that an abrupt reduction in marine pollution inadvertently created a  ‘geoengineering termination shock’ that could double the rate of warming in the 2020s.

In January 2020, new International Maritime Organisation (IMO) regulations (abbreviated to IMO2020) took effect, reducing the sulphur content in international shipping fuels from 3.5% to 0.5%.

The intention was to reduce aerosol loadings that have negative consequences on human health. However, aerosols also contribute to cloud formation and  brightening, which reflect solar radiation back into space.

Thus, human activity in the form of marine pollution or aerosol loading has been having a cooling effect on global climate for decades by temporarily brightening clouds. The recent reduction in aerosols has dimmed clouds, which has increased the amount of radiative forcing that reaches the surface of the ocean.

The study combined satellite observations with a chemical transport model to quantify the amount of radiative forcing caused and to estimate the climate impacts. The study found that the North Atlantic experienced the strongest warming effects, with weaker but ‘still notable’ radiative forcing experienced in the North Pacific and South Atlantic. This is consistent with the amount of shipping traffic and cloud cover in those regions.

“The IMO2020 is expected to provide a substantial boost to the warming rate of global mean temperature in the 2020s. The rate of warming is expected to ramp up quickly from 2020 and asymptotes to the longer-term trend line at the end of 2020. The 2023 record warmth is within the ranges of our expected trajectory. The magnitude of IMO2020 induced warming means that the observed strong warming in 2023 will be a new norm in the 2020s.”

The chart below, shows the projected impact on global temperatures.

Fig. 3: Time series of global temperature anomaly since 1980 (Lensen et al., 2019).

From: Abrupt reduction in shipping emission as an inadvertent geoengineering termination shock produces substantial radiative warming

The trend line is dashed. The expected warming trajectory from the combination of the linear trend and the calculated warming effect from IMO 2020 shock based on the energy balance model. The upper and lower bounds of the expected warming are shown in shades. The baseline period for temperature anomaly is between 1951 and 1980.

The findings of the study correlate with commentary from climate scientist James Hansen, who commented in May,

We interpret acceleration of warming since 2010 to be a consequence of decreasing aerosols, with a significant contribution from reduction of ship aerosols due to the strict 2020 emission limit imposed by the IMO (International Maritime Organization). Another recent social media comment is that reduction of ship emissions is negligible compared to emission reductions by China. That comment misses the point. It is well known that ship emissions are a tiny part of total anthropogenic emissions and of emission changes, but ships emit into relatively pristine ocean air and the aerosol effect is nonlinear. The inadvertent experiment provided by the IMO emission limit is a great opportunity to improve understanding of aerosol and cloud physics.

The study also echoes this comment from Hansen about the implications of aerosol forcing estimates on the estimated range for climate sensitivity (how much the planet warms when CO2 emissions are doubled):

Accurate evaluation of humanmade aerosol forcing has double importance because of implications for climate sensitivity, as we have discussed elsewhere. If IPCC has underestimated aerosol forcing, they probably have also underestimated climate sensitivity.

2. Can we deliberately geo-engineer the clouds?

The study authors say that this inadvertent geo-engineering experiment indicates that deliberate efforts to reduce the rate of global warming through marine cloud brightening (MCB), where marine low clouds are seeded with aerosols to become brighter, could be used to temporarily cool the climate.

Hansen advocated for geo-engineering to temporarily reduce global temperatures in his ‘Global Warming in the Pipeline’ paper, published in 2023. It is worth noting that Yuan et al. (2024), the authors of the new paper cited above, highlight the different hemispheric effects of the current reduction in radiative forcing.

The effects have been much stronger in the Northern hemisphere than the Southern, and such contrasts between hemispheres have implications for regional climate and precipitation.

Any deliberate effort to geo-engineer the climate using MCB could create ‘severe perturbations’ in monsoon and other substantial rain patterns if it changed the contrast between hemispheres, they say. This would, in turn, impact regional agriculture and food security, not to mention potentially aggravating geo-political tensions.

The current inadvertent geo-engineering experiment highlights both the possibilities and the risks of attempting to manage the climate. One of Aotearoa New Zealand’s own globally renowned climate scientists, Kevin Trenberth, is worth paying attention to on this subject.

In this article for Newsroom, Trenberth uses the following fable to illustrate the very human dangers of deliberately changing the climate in ways that will inevitably benefit one group at the expense of others.

“Once upon a time in an idyllic country, near a small town and a farming community, a rope hung out of the sky. One pull on the rope changed the weather from fine and sunny to cloudy and rainy, and the next pull changed it back. For many years the people cooperated; the farmers used the rains to help grow crops, and the townspeople enjoyed the sunny periods. But there came a time when the townspeople protested the rain and wanted more sunshine. The farmers were concerned about their crops. And so arguments broke out, with a person from the town pulling on the rope, followed quickly by a farmer pulling it again, and they pulled and pulled and . . . broke the rope.”

We should, according to Trenberth, “give up on the notion that geoengineering will save us from ourselves” and instead focus our attention on cutting emissions and fossil fuel use.

3. A revealing new way to forecast weather

In brighter news, a revolution in the field of extreme weather attribution is being heralded on the back of another study published in Nature this week.

The new approach uses state-of-the-art weather forecasting systems instead of climate models or statistical approaches to detect the physics of events.

Their analysis shows (chart below) that the 2021 Pacific Northwest heatwave was made at least 8 times more likely as a result of human influence on the climate, with the likelihood of such events doubling every 20 years in the future.

They claim that the use of such predictive services in routine weather forecasting would lay bare the human influence on extreme weather risk and provide critical support to adaptation planning.

Fig. 1: Features and forecasts of the Pacific Northwest heatwave.

From: Heatwave attribution based on reliable operational weather forecasts

4. The triple threat to our oceans

Extreme ocean heating has featured in other news this week. New research published in AGU Advances looks at the triple threat posed to oceans by extreme heat, oxygen loss and acidification.

About a fifth of the world’s ocean surface is particularly vulnerable to the three threats hitting at once, spurred by human activity such as the burning of fossil fuels and deforestation, the study found. In the top 300 meters of affected ocean, these compound events now last three times longer and are six times more intense than they were in the early 1960s, the research states.

The study’s lead author warned that the world’s oceans were already being pushed into an extreme new state because of the climate crisis. “The impacts of this have already been seen and felt,” said Joel Wong, a researcher at ETH Zurich, who cited the well-known example of the heat “blob” that has caused the die-off of marine life in the Pacific Ocean. “Intense extreme events like these are likely to happen again in the future and will disrupt marine ecosystems and fisheries around the world,” he added. The Guardian.

5. Hurricane warnings in the shadow of Trump

In addition, the record temperatures in the Atlantic have driven predictions of an above average hurricane season in the US from the National Oceanic and Atmospheric Administration (NOAA).

Scientists are warning the public to “expect a summer of natural disasters caused by the powerful storms”.

Such warnings are themselves at risk in an era of disinformation, as Trump allies threaten to disband the NOAA, potentially worsening society’s capability for addressing climate impacts in the US and beyond.

“The Project 2025 report takes aim at NOAA, suggests the National Weather Service commercialize its forecasting operations and says information from the National Hurricane Center should be “presented neutrally, without adjustments intended to support any one side in the climate debate.”

Reorganizing NOAA is a key component of these plans. The Project 2025 report says NOAA should be “broken up and downsized” because “its current organization corrupts its useful functions.”

The document describes the agency’s office of Oceanic and Atmospheric Research as the “source of much of NOAA’s climate alarmism” and says the “preponderance of its climate-change research should be disbanded.”” E&E News by Politico

6. Republicans look to shut down climate lawsuits

Finally, in other news out of the US, a new round of climate lawsuits against fossil fuel polluters is facing pushback from the political right.

Republican Attorney Generals (AGs) are asking the Supreme Court to intervene to prevent Democrat-led states from filing lawsuits in their own state courts against fossil fuel companies for damages from severe storms, wildfires and rising sea levels.

“The unusual request comes as dozens of states and local governments have filed lawsuits alleging that fossil fuel companies deceived the public about the risks of their products contributing to climate change. The lawsuits claim billions of dollars of damage from such things as severe storms, wildfires and rising sea levels.

The Republican action specifically seeks to stop lawsuits brought by California, Connecticut, Minnesota, New Jersey and Rhode Island, though lawsuits also have been filed by other states, tribes, counties and cities.

The GOP attorneys contend only the federal government can regulate interstate gas emissions, and states have no power to apply their own laws to a global atmosphere that reaches well beyond their borders. The court filing also contends the climate-related lawsuits could drive up energy costs in other states, including for electricity generated from natural gas.” The Independent.

Ka kite ano

Bernard and Cathrine

This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit thekaka.substack.com/subscribe